Buyer’s Burnout
Savers Fatigue & Buyers Burnout – Managing Your Own Expectations
As property prices in the major Australian Eastern seaboard cities including Brisbane, Sydney, Melbourne and their major surrounding CBDs continue to reach historic highs, many potential investors find it difficult to enter the market or afford a suitable investment property.
This increase in price has forced many home buyers to move even further away from CBDs and many investors to purchase based on budget alone rather than factor in all the elements that make a sound long term investment.
The constant need to engage in bidding wars, research new areas, and face the fear of missing out adds to the stress.
“Times have changed and it is the investors who adapt to overcome the challenges that will prevail.”
There is no reason why you cannot take advantage of the Australian real estate market, it all comes down to finding the strategy that works for you and having a long term perspective.
Saver’s Fatigue and Equity Fatigue
‘Saver’s fatigue’ is a term used to describe the feeling of exhaustion and frustration that individuals experience when trying to save money over an extended period of time.
It often occurs when people face obstacles or setbacks in their savings goals, such as unexpected expenses, slow progress, or the inability to meet financial milestones.
This fatigue can lead to a loss of motivation and can make it challenging to maintain discipline in saving efforts.
Saver’s fatigue usually happens when one’s expectations are not realistic and their savings plan is impacting their day to day lives far too much.
To combat saver’s fatigue, it’s important for individuals to periodically reassess their financial goals, seek advice or support, and find strategies to stay motivated and on track with their own saving plans.
‘Equity Fatigue’ is a term that we have coined here at Astute Property Network to describe the often reckless behaviour of people once their own homes have experienced substantial growth in value.
Whether it is a new car, new pool or some ‘perceived’ much needed renovations, many people are not making wise financial decisions and continue to increase their mortgage balance on depreciating assets as their home increases in value.
Renovations are often seen as an investment however it is all to common to see people over capitalising on their own home renovations only to see a very mild increase in value or in some instances no increase at all.
Equity fatigue usually happens when there are no clear long term goals which leads to too much influence from peers or commercial marketing.
To combat equity fatigue, it’s important for individuals to have clear long term goals and if equity must be used for purchasing a depreciating asset or renovations, that care is taken not to over capitalise and therefore risk the long term goal. The short term decisions should be in harmony with the long term goals.
If you are at the savings stage it is crucial that you avoid focussing on the market. Instead, focus on your vision and let that motivation inspire you to get more out of your career or other income sources.
Avoid the media and avoid talking to your peers about the market or rates. Until you have your deposit/equity, it will only serve as a distraction and possibly a demotivator.
Saving for your cash deposit or paying down your home to create equity can take a long time. It’s important that you build your deposit/equity while living within your means.
Not planning for both luxuries and essentials can quickly lead to fatigue.
Buyer's Burnout
Buyer’s burnout in the Australian real estate market refers to the state of frustration and disillusionment experienced by prospective property buyers due to various challenges and stressors in the property buying process.
This phenomenon has become increasingly prevalent, primarily because of factors such as soaring property prices, limited housing supply, and intense competition among buyers.
But the biggest factor by far that is causing this phenomenon is the media and public sentiment.
For the investor, this can lead to a lack of patience and bad decisions or worst case scenario it can lead to potential investors giving up all together.
Get clear on what you want and get excited about it. Make sure that all parties are on the same page in regard to the strategy.
Run your own race and avoid getting distracted by properties that you know are beyond your comfort zone. This will inevitably lead to demotivation and burnout.
“If you continue to chase two rabbits you will go home hungry”. Stay focussed on one major goal and keep all other smaller goals in harmony with the larger goal.
Avoid making the mistake of turning your investment into a trophy. This is a business decision and your ego needs to check itself at the door!
Your investment will yield more than enough wealth over time to have what you want but until you set your money to work, you will always be working for your money.
Lastly, a final note from the author, if you are not an expert in property investment, property management and negotiations, please consider investing in a good Buyers Agent that can help you. You worked far too hard on either building the deposit or exercising great discipline in not spending the money. Invest in the help, be open to the advice and achieve true freedom.